If you are going through a separation and divorce, probably the last thing on your mind is what to do if you or your spouse should happen to pass away during the divorce process.
Unfortunately, while not common, this does happen. It is especially concerning if one of the spouses is sick with a terminal illness during the divorce process. (I know that many of you are thinking, that’s just wrong… but believe me, it does happen).
Which leads us to the question of the day… can you write your spouse out of your will? In other words, “can you disinherit your spouse?”
The long and the short of it is that yes, you can “disinherit” your spouse. But there are statutory limitations on just what you can do, which I will address in just a bit. But first, I want to share with you what your options are if you were to be written out of your spouse’s will.
What Can You do if Your Spouse “Disinherits” You?
In North Carolina, you are permitted to take what is called an “elective share” of your spouse’s estate, regardless of whether you were happily married or had begun the process of separating.
This means that you can take a percentage of your spouse’s estate after they pass on. The percentage in North Carolina will depend on a number of factors, including whether or not you had children and how long you were married.
So that’s the good news.
You are probably wondering, “what’s the bad news”?
The bad news is that either you or your spouse can take steps to minimize the amount of assets in your respective estate. Here are some of the typical assets that one would find in an estate going through probate:
- Bank Accounts
- Personal Property
- Real Property (i.e. your house)
- Life Insurance proceeds
- Retirement Accounts (assuming your beneficiary designations are not current)
- Investment Accounts
However, and this is the big caveat, nearly every one of those assets can be minimized or eliminated from an estate going through probate, which is bad news for the spouse seeking an elective share.
For example, your spouse can choose to remove you as beneficiary from their life insurance policy or retirement accounts. Or they can change the title of their bank and investment accounts into a revocable living trust, thus taking those assets out of probate. They can also change the title of the vehicles into a trust.
And if they owned your marital home prior to your marriage and never added you to the deed, you are pretty much out of luck there too, especially if they put the home into a trust or added a child from a prior marriage to the deed.
All of these options are worst case scenarios because there are limitations to the types of transfers a spouse may make while they are married. For example, one spouse may not be able to remove the other spouse as beneficiary of certain retirement plans or pensions without a showing that they are legally separated, divorced, or absent a waiver signed by the other spouse.
Should you undertake estate planning while going through a separation and divorce?
At a minimum, every client going through a divorce should consider meeting with an estate planning lawyer. The reason for this is two-fold:
- Many clients don’t have any estate planning documents in place anyway – so this is an ideal time to consider putting a plan in place;
- Clients that do have documents in place typically leave all of their assets to their estranged spouse.
In either situation, it is important to sit down with an estate planning lawyer to discuss what would happen if you die without any additional planning.
I don’t frequently advise my clients to undergo significant estate planning while they are in the process of separation and divorce. However, especially in situations where my client has ZERO planning in place, I do recommend that they talk with an estate planning lawyer and have, at a minimum, a “Divorce Will” drawn up.
A “divorce will” is a simple will that will dictate what will happen to my client’s assets if they should happen to pass on after the decision has been made to end the marriage, but before the separation agreement has been signed or a divorce judgment entered. In addition, we will make sure that my client has some additional documents in place, such as a Health Care Power of Attorney, Durable Power of Attorney, Living Will, Advanced Directives, etc.
While the division of assets during the divorce could change how we would approach your estate planning and cause an extensive re-write of your plan, this reason alone is not sufficient enough to ignore planning until the divorce is finalized.